Digital adoption improves FNB resilience during Covid-19

Consumers' digital adoption enabled FNB to produce a resilient performance during difficult circumstances.

First National Bank has reported a profit decline of 30 percent for the year ended 30 June 2020, due to a struggling economy and Covid-19. 

Despite escalating health risks and financial difficulties for both consumers and businesses, FNB still delivered a respectable return on equity of 25.8 percent, as well as a resilient operating performance. 

The key operational highlights that underpinned this resilient performance include: 

  • Deposits increased by 17 percent
  • Loans and advances increased by 3 percent
  • Banking App volumes increased by 28 percent
  • eWallet transacting base increased by 39 percent
  • Wealth and Investment accounts increased by 13 percent
  • Unchanged fees helped customers save over R410 million
  • FNB Life ensured 6.3 million lives
  • eBucks earn value increased by 9 percent

In a press release, FNB CEO Jacques Celliers expressed his gratitude to the bank’s customers for their ongoing support that is demonstrated through increased adoption of digital platforms, which enabled FNB to produce a resilient performance in very difficult circumstances. “Our momentum prior to lockdown was encouraging across all performance indicators and we are pleased to report accelerated adoption of our digital channels throughout the financial year. After the announcement of a national lockdown in March, we were agile enough to calibrate our operations to safely provide essential services in branches and cashflow relief on platform.” 

He explained that FNB’s relief covered instalments on approximately 606,000 agreements for retail and commercial clients. “While most of our commercial clients had already received relief from us, as at the end of August we have also approved in excess of R1.2 billion on the government-backed Covid-19 loan scheme.” 

In addition to these measures, FNB sought to alleviate financial pressure on retail and commercial clients by keeping its monthly account fees unchanged while expanding value across bank accounts. “After witnessing a significant impact in customers’ income during level 5 lockdown, we are now seeing retail customer average income levels recovering to around 95 percent of what they were before lockdown,” Jacques said.

According to the statement, FNB is committed to, and continues to, play a major role in stimulating economic and cashflow activity among its suppliers. As a result, since March, over R10 billion worth of early invoice payments for 5,288 suppliers have been processed, many of which are SMEs. By June, FNB had waived approximately R119 million in Saswitch fees, unpaid fees, rental on point of sale devices and cash boxes, as well as early withdrawal fees for commercial clients. 

“The pandemic has reinvigorated our commitment to helping customers in every context and we are inspired to further accelerate our platform journey in the months ahead. We are equally grateful to our frontline and other essential staff who continue to help customers beyond the call of duty. In support of the re-opening of the economy, our branches are now operating at full capacity. We are encouraged by evidence of green shoots in consumer and business economic activity, and we hope to see this accelerating even further to boost economic recovery,” Jacques concluded .